Third-quarter earnings before interest and tax (EBIT) outperformed the corresponding 2003 figure by 34 percent, at €21.0 million. Earnings before tax (EBT) rose to €21.9 million. The bottom line improved by 95 percent: Net profit totaled €12.7 million. Adjusted for currency translation effects, total revenues matched 2003 levels, at €96.6 million. However, the high-margin licensing segment posted an above-average gain of 10 percent.

Strong license sales across both business lines
Between July and September, new software licenses generated €25.1 million (€22.9 million in Q3 2003). The lion’s share was attributable to Enterprise Transaction Systems (ETS), which enjoyed 10 percent growth to €17.5 million. This business line, which is focused on mainframe modernization, profited from the positive customer response to our innovative product packages. For example, the packages designed to increase the productivity and performance of IT systems, launched in the first half of the year, as well as the Adabas SQL Gateway, contributed over €1 million.

In the systems integration segment, licensing revenues gained 2 percent to €5.2 million. In this area, too, the enhanced offering prompted an increase in demand. However, the new, optimized XML Business Integration portfolio remains relatively new to the marketplace; its full impact on sales figures will not be felt until 2005.

Third-quarter product revenues (licensing and maintenance) amounted to €71.1 million (€71.2 million in Q3 2003). Maintenance services generated €46.0 million (€48.3 million). Adjusted for currency effects, this is a 1 percent fall. Revenues from professional services totaled €25.2 million (€27.1 million), impacted by the sluggish German market and the traditional dip in sales at this time of year in Southern Europe.

Buoyant license trade in Europe
In spite of weak economic fundamentals in the eurozone, third-quarter revenues outperformed 2003 figures by 7 percent in Southern and Western Europe, and by 5 percent in Central and Eastern Europe. Both regions posted above-average gains in the key licensing segment. In Southern and Western Europe, license sales increased by 56 percent, and in Central and Eastern Europe by 61 percent – accounting for nearly one third of both regions’ total revenues.

In Northern Europe, Asia/Pacific, South Africa, revenues were unchanged over 2003. Business was muted in the USA, as public-sector organizations delayed spending decisions in the run-up to the presidential elections.